However, many of those surveyed remained pessimistic about the state of the British and world economies, with inflation rising strongly at home and the sovereign debt crisis bubbling away overseas.

The FT survey found that most leading economists believe Osborne's deficit-reduction programme will slow growth this year, but that the economy will continue to expand at a modest pace. Ben Broadbent of Goldman Sachs said: "We are relatively sanguine about the UK's ability to grow through the fiscal tightening."

However, several of those surveyed did caution that a double-dip recession remained a possibility, as the government implements a wide-ranging fiscal tightening while the global economic crisis is still being played out. Tim Leunig of the London School of Economics suggested it is a one in three chance, while John Hawksworth of PricewaterhouseCoopers estimated the odds at "20-30%".

Raising VAT from 17.5% to 20% will, the chancellor believes, raise around £13bn to help reduce Britain's borrowings. The deficit for the current financial year is expected to hit £155bn.

After growing strongly earlier in 2010, the UK economy probably slowed in the last three months of last year – a trend expected to continue in 2011.

Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club, has predicted "a pretty bumpy profile for GDP growth" in the first half of this year, while IHS Global's Howard Archer forecasts growth of 0.3% in both the first and second quarters.

The chancellor may be forced to rethink his deficit-reduction plans if the economy falters. Thirteen of those surveyed by the FT believe that Osborne will turn to a "Plan B" during the year.

Andrew Simms of the New Economic Foundation was the lone economist who predicted a double-dip recession. "There is no guarantee at all that a recovery will develop … On the contrary, there are numerous quite serious reasons to believe the opposite, that a negative, self-reinforcing downturn could develop," Simms said.

But Nick Bosanquet of Imperial College London declared that the UK economy will be "the surprise success of Europe" this year.

Osborne's austerity cutbacks were cited by 34 economists as one of the top three risks to the UK economy in 2011. The top threat was the European sovereign debt crisis, amid ongoing concern over Portugal and Spain's ability to cover their borrowings. Experts believe this will be a "make or break" year for the euro, with some predicting that the single currency will not survive the next decade.

High inflation was also a major concern, with the Consumer Prices Index expected to hit 4% in the next few months. Nearly half of the economists suggested that the Bank of England was losing credibility, having missed its inflation target throughout 2010.

The FT did also point out, though, that economic crystal balls can offer a cloudy view of the future. Most failed to predict the UK's strong bounceback in 2010, in which the economy grew by 0.3%, 1.1% and 0.7% in the first three quarters of the year.